2 External recruitment to the SCS
6. This part of the report provides relevant factual
background on the extent and sources of external recruitment to
the senior civil service (SCS) and explains the process for making
these senior appointments.
Level and sources of external
recruitment
7. The senior civil service comprises the most senior
staff in government departments and agencies, including permanent
secretaries and the next few layers of senior management down
(broadly speaking, Directors General, Directors and Deputy Directors).[6]
The total size of the SCS at December 2009 was 4,300 members.[7]
Cabinet Office data on senior appointments show that, since 2004,
around 20 percent of the senior civil service has consisted of
individuals originally recruited from outside government.[8]
In 2008, the proportion of these external appointees making up
the SCS was 23 per cent. Meanwhile, figures on the flow of new
entrants into the SCS over the past five years indicate that the
rate at which "outsiders" are entering the SCS has been
around 30 per cent of the new intake each year (and sometimes
higher), as Table 1 illustrates:
Table 1: New entrants to the SCS per year—percentages
of external and internal recruits
| 2004 |
2005 | 2006
| 2007 | 2008
|
| New SCS entrants recruited externally
| 191 (36%) | 169 (35%)
| 172 (30%) | 196 (38%)
| 157 (29%) |
| New SCS entrants recruited internally
| 337 (64%) | 309 (65%)
| 404 (70%) | 326 (62%)
| 376 (71%) |
| Total | 528
| 478 | 576
| 522 | 533
|
Source: Cabinet Office, Ev 24
8. The extent of external recruitment has been even
more marked at the very highest levels of the civil service. The
"Top 200" group of senior civil servants comprises permanent
secretaries and the next tier of senior civil servants (Director-General
level). Since 2005, more than half of all new entrants to the
Top 200 have come from outside the civil service, as the following
table shows.
Table 2: New entrants to the Top 200 per year—percentages
of external and internal recruits
| 2004 |
2005 | 2006
| 2007 | 2008
|
| New Top 200 entrants recruited externally
| 14 (40%) | 22 (61%)
| 15 (52%) | 18 (60%)
| 21 (54%) |
| New Top 200 entrants recruited internally
| 20 (57%) | 14 (39%)
| 14 (48%) | 11 (37%)
| 18 (46%) |
| Unknown | 1 (3%)
| 0 (0%) | 0 (0%)
| 1 (3%) | 0 (0%)
|
| Total | 35
| 36 | 29
| 30 | 39
|
Source: Cabinet Office, Ev 49
9. These statistics on external and internal SCS
recruits present only part of the picture, however. Many of those
appointed to the SCS from within the civil service will not have
faced competition from outside, as only a certain proportion of
SCS appointments are open to applicants beyond government. The
process for recruiting senior civil servants, including the decision
on whether to open up recruitment to competition from outside
the civil service, differs according to the level of seniority
in the civil service. The Civil Service Commissioners explained
the process to us:
For the majority of posts up to and including SCS
pay band 1 level, departments and agencies are free to conduct
open competitions without direct Commissioner involvement. In
doing so, the Orders in Council require them to adhere to the
Commissioners' Recruitment Principles (which replaced the Recruitment
Code with effect from 1 April 2009). Recruitment at these levels
is also subject to an audit regime which the Commissioners undertake
on an annual basis.
The Commissioners are directly involved when a vacancy
within the top pay bands of the Civil Service—SCS pay band
2, SCS pay band 3 and Permanent Secretary (a total of around 600
posts)—is subject to open competition. We may also chair
the recruitment boards for some other posts by agreement. It is
for government departments to decide whether or not to go to open
competition at SCS pay band 2 level. At SCS pay band 3 and Permanent
Secretary level (Top 200 posts) the decision is taken by the Senior
Leadership Committee on which the First Commissioner sits. In
doing so, it is guided by a "Top 200 Protocol" agreed
in July 2007 between the Commissioners and the Senior Leadership
Committee. This provides that:
- appointments will generally be subject to competition,
unless there is an exceptional case of immediate business need
or a lateral move is desirable;
- appointments will go to open competition, unless
the business requirements are such that there is little prospect
of recruiting someone from outside the Civil Service.[9]
10. According to the Cabinet Office, in 2007-08 there
were 771 competitions for SCS appointments, 305 (40 per cent)
of which were open competitions.[10]
In recent years, most of these open competitions have been won
by external candidates, whether from the private sector or from
local government and the wider public sector. The following table
sets out the backgrounds of successful candidates in open competitions
for posts at SCS pay band 2 and above which were overseen by the
Civil Service Commissioners:
Table 3: Outcomes of open competitions for appointments
to the SCS
| Year | Appointments from Commissioner-chaired open competitions at SCS pay band 2 and above
| Sources of successful candidates
|
| | Civil service
| Wider public sector |
Private sector |
| 2008-09 | 98
| 62 (63%) | 13 (13%)
| 23 (24%) |
| 2007-08 | 105
| 43 (41%) | 23 (22%)
| 39 (37%) |
| 2006-07 | 90
| 36 (40%) | 21 (23%)
| 33 (37%) |
| 2005-06 | 111
| 42 (38%) | 30 (27%)
| 39 (35%) |
| 2004-05 | 91
| 38 (42%) | 17 (19%)
| 36 (39%) |
| 2003-04 | 89
| 43 (48%) | 19 (21%)
| 27 (30%) |
| 2002-03 | 97
| 29 (30%) | 26 (27%)
| 42 (43%) |
Source: Civil Service Commissioners, Ev 31; and
Civil Service Commissioners, Annual Report
2008/09, p 21
11. As Table 3 indicates, until 2008-09 the trend
for several years had been for external candidates to win most
of the high-level SCS posts open to outside competition. Of these
outside appointees, the majority have been from the private sector.
Yet the number of SCS appointees from the private sector has been
highly contentious. In large part the controversy stems from the
higher salaries paid to attract private sector candidates, an
issue we explore in greater depth below. We consider here the
reasons why government has sought private sector expertise.
12. The most obvious reason explaining why government
recruits from the private sector is in order to plug skills gaps
in certain professions within government, particularly in areas
such as finance, human resources, information technology and procurement.
The First Civil Service Commissioner Janet Paraskeva told us that:
Over the past 10 or so years, I think it has been
clear that the Civil Service needed skills that it had not necessarily
grown of its own, trained accountants, IT specialists, HR specialists
and so on. There has been, I think, an increase, therefore, in
the numbers of people that have joined from outside because of
the need to embrace those professions within the Civil Service.[11]
13. This was confirmed by Sir David Normington, Permanent
Secretary at the Home Office, whose 2008 review of senior civil
service staffing and remuneration was motivated in part by concerns
about increasing numbers of appointments to the SCS from outside:
...the reason we have had to recruit much more heavily
from outside in the last few years, under the previous Cabinet
Secretary and the present one, is because we have not invested
heavily enough in our own development. We have done a lot in some
areas but in the Civil Service we have been very late investing
in professional skills and qualifications. We have big finance
departments, for instance, but it is only in the last five, six,
seven years that we have put much greater emphasis on the development
of that professional skill; we have been very late doing that.
It is not surprising therefore, if we do not have enough senior
qualified finance directors, because we have not groomed them.
My report is only saying that balance has to shift.[12]
14. Sir David went on to stress the importance of
the civil service developing the right skills among its future
leaders—effective "talent management", in the
HR parlance. He noted that:
There are many private sector examples of companies
which do exactly what the Civil Service does which is grow their
own. Clare Chapman, who came into the Health Service from Tesco
was surprised even now at the extent to which we took the risk,
as she sees it, of recruiting at the very senior levels from outside
the organisation.[13]
15. For
some years the civil service has made a significant number of
senior appointments from outside government, in particular from
the private sector. The increased reliance on external recruitment
in recent years—especially at the highest levels of the
senior civil service—points to a wider problem about the
civil service's ability to foresee its future skills needs and
to develop the required skills among its own people.
We explore later in this report[14]
how government can ensure it is equipped with the people and skills
it needs.
Civil service staffing in a tighter
fiscal environment
16. Our consideration of senior recruitment comes
against the backdrop of a tightening fiscal environment for the
civil service and the broader public sector. This inevitably will
have implications for the extent of civil service recruitment
generally, but particularly for external recruitment as it is
more costly (both because of the costs entailed by opening recruitment
to external competition, and from the higher salaries that on
average are offered to external candidates).
17. The Government has for some time taken pride
in announcing reductions made to the overall size of the civil
service. Rt Hon Liam Byrne MP, then Minister for the Cabinet Office,
said in February 2009 that the civil service had been cut by 86,700,
consistent with the aim to have "the smallest civil service
since the Second World War".[15]
More recently, the Government indicated in the 2009 Pre-Budget
Report that the cost of the senior civil service pay bill would
be cut by £100 million over three years. The Smarter Government
report explained how the Government intended to do this:
While the size of the Civil Service has fallen over
the last few decades, the relative size of the Senior Civil Service
has increased. There are now 4,300 Senior Civil Servants compared
with 3,100 in the mid 1990s, costing some £500 million per
year…We will modernise Civil Service structures to reduce
unnecessary bureaucracy and management layers, increase staff
empowerment and reduce the cost of the Senior Civil Service, saving
£100 million annually within three years.[16]
18. The increase in the size of the SCS over the
last decade is at odds with the overall reduction in the number
of civil service posts during the same period. Sir David Normington
has attributed this growth in part to greater demands on the SCS,
for example from increasingly complex government programmes and
projects.[17] The civil
service union Prospect was more sceptical about whether past SCS
growth had been entirely warranted, and suggested that analysis
should be done to identify whether there are genuine upward pressures
on the size of the SCS.[18]
19. The economic
situation and tighter public spending mean that government has
to make difficult decisions about the type and level of recruitment
to the civil service, especially the senior civil service. It
is therefore likely that the current level of external recruitment,
which is typically more expensive than other types of civil service
recruitment, will have to be reconsidered in the present economic
climate.
6 Civil Service Management Code, section 5.1
(available at http://www.civilservice.gov.uk) Back
7
HM Treasury, Putting the Frontline First: Smarter Government,
Cm 7753, December 2009, p 49 Back
8
Ev 24 Back
9
Ev 31. In broad terms, SCS pay band 1 refers to Deputy Director
posts, SCS pay band 2 to Director posts and SCS pay band 3 to
Director General posts. Back
10
Ev 49. Figures on the number of competitions include movements
between departments, promotions within the SCS, and new entrants
to the SCS; they do not include movements within a department
at the same pay band. Back
11
Q 2 Back
12
Q 64 Back
13
Q 129 Back
14
Para 68 ff Back
15
"Times of change demand change of pace: next steps for public
service reform", speech by Liam Byrne to Guardian public
services summit, 5 February 2009 Back
16
Cm 7753, p 49 Back
17
Normington report, p 14 Back
18
Ev 43 Back
| 
